Credit Suisse ended a scandal over mortgage-backed securities that harkened back to before the financial crisis of 2008/09 – for less than it had feared.
Zurich-based Credit Suisse can shut the door on a U.S. legal battle over mortgage securities after bond insurer disclosed overnight that it had settled with the Swiss bank for $600 million. That's shy of the $680 million that Credit Suisse had feared recently.
The bank is still likely to post a fourth-quarter loss due to the legal tussle as well as a write-down on its major stake in hedge fund York. The MBIA settlement comes just 12 weeks before Urs Rohner ends his tenure as chairman of Credit Suisse and Lloyds CEO Antonio Horta-Osório takes over.
Pugnacious Fighter
The MBIA dispute dates back to 2009, when Rohner was still Credit Suisse's chief lawyer but on his way to the board. He is known for responding pugnaciously (if not always successfully) to almost all probes the bank has been involved in.
These include a $2.6 billion landmark U.S. tax probe in 2014, for which the bank's stubbornness was explicitly rapped by U.S. justice officials, to second-guessing its regulator on an investigation into corporate espionage.
